If your child is starting college this month, you might vaguely remember an email from the institution regarding student health insurance.

Many prestigious private colleges and several public universities automatically enroll students in Student Health Insurance Plans. This insurance typically costs an average of $2,924 per year at public colleges and $3,874 at private colleges, as per an industry survey for the 2023-24 academic year.

Here’s the catch: Most students do not actually need this insurance.

Colleges often mandate that students have comprehensive health insurance, and the Student Health Insurance is primarily in place to cover those who arrive without it.

Some students, such as international students, those from families with insufficient insurance, and those with ongoing medical or mental health conditions, gain significant advantages from campus health insurance.

However, experts believe that for many other students, campus health insurance is an unnecessary expense that overlaps with existing coverage.

‘The costs are significant, not just a few hundred dollars.’

“The costs are significant; we’re discussing thousands, not just a few hundred,” stated Julian Treves, an investment advisor specializing in college finances at Creative Financial Designs.

According to a survey by Hodgkins Beckley & Lyon, a higher education consultancy, Stanford University charged $7,128 for student health insurance for the 2023-24 academic year. The fees were $5,144 at Northwestern University, $4,636 at Brown, $4,210 at the University of Pennsylvania, and $4,762 at Emory – all among elite private institutions.

For public flagship schools, the costs were $3,093 at the University of Florida, $3,592 at Ohio State University, $3,858 at UC Berkeley, and $3,900 at the University of Iowa.

To avoid these hefty fees, parents typically must encourage their student to complete an online waiver, confirming their family has adequate health insurance in place.

“When my children headed to college, we waived the student health insurance each time,” said Steven Bloom, assistant vice president of government relations at the American Council on Education, which advocates for colleges and universities. “It doesn’t make sense for families with solid health insurance.”

Stephen Beckley, a consultant at Hodgkins Beckley, noted that very few colleges, if any, actually mandate student health insurance; instead, they just require that students be adequately insured.

However, around 90% of major private four-year colleges and 35% of major public universities automatically enroll their students in campus health insurance plans, Beckley mentioned. If opting out is desired, it is the responsibility of the student.

If you want to opt out of student health insurance, act quickly.

It’s advisable to take action promptly. Colleges typically require students to submit their waivers shortly after the semester begins in fall.

Student health insurance is often cited as “the largest discretionary expense” that colleges impose, according to Bobbi Rebell, a personal finance expert from CardRates.com.

This cost adds up significantly, especially when the most expensive private colleges exceed $70,000 in tuition and fees.

Treves shared that his clients often spend hours looking for ways to cut down college expenses. He urges families to consider waiving student health insurance if they already have reliable coverage: “It’s a straightforward method to prevent the unnecessary cost of double insurance for your children.”

Colleges usually make efforts to notify students and their families when they have been automatically enrolled in health insurance that they might not require.

“Most colleges actively encourage the waiver process, so it should not be overlooked by families,” Beckley stated. “There are typically multiple emails sent out.”

However, many families either miss these emails or mistakenly believe they don’t have a choice regarding the insurance purchase.

Parents Often Think Campus Health Insurance is Required

“I would guess that most parents think it’s a requirement,” Rebell indicated. “They see a bill that states it is ‘mandatory’.”

Even when parents realize that student health insurance may not be necessary, convincing their children to locate and fill out potentially complex insurance forms can be challenging.

Financial specialists point out that auto-enrollment has a significant influence because of inertia; consumers are less likely to take action to decline optional charges when it involves effort.

“When you are enrolled, you tend to stay enrolled,” observed Kimberly Palmer, a personal finance specialist at NerdWallet.

Nonetheless, if you have reliable insurance for your family, taking the steps to opt out of student health insurance could be worthwhile.

According to Beckley, most campus health centers do accept external insurance. Therefore, your student will get the same medical and dental benefits at school as they would while traveling or visiting relatives.

Evaluating Student Health Insurance Costs, Say Experts

However, if you choose to opt out of student health insurance, consider that your student might face higher healthcare expenses on campus compared to home.

Colleges are “shifting more costs onto the students” for visiting campus health services, Beckley noted, as fees increase due to rising expenses.

Some health insurance plans may not be as effective when the student is away from home. For example, if you have a regional HMO in Virginia and your child goes to college in Colorado, they might encounter challenges finding accessible healthcare. However, if your child attends school in the same state, locating a suitable doctor in your network could be easier.

Students who are unwell often end up at local urgent care centers, where the out-of-pocket costs for medical care can be higher than what they would pay at their family doctor.

In fact, some urgent care facilities near colleges promote their services specifically to students, although they are not the only healthcare choices available.

“Sometimes, they are set up to really take advantage of students,” Beckley pointed out.

When is Student Health Insurance Economical?

For those with ongoing medical conditions or mental health requirements, opting for student health insurance might ultimately save money. Many colleges partner with local therapists who accept student health insurance even if they do not take it for other patients.

“There are several situations where this could end up saving you money and provide a better insurance option,” Beckley explained.

Thus, if you’re preparing to send your child off to college, take some time to review the overall tuition and fee structure. Search for your college online along with “student health insurance” to understand the institution’s policies. Also, reassess your own insurance coverage.

If you decide to decline the student health insurance, experts recommend investing time into understanding healthcare options available to your child, be it on-campus or off.

“It’s simply a reasonable step,” Treves stated. “Honestly, incoming freshmen usually don’t think about, ‘Where’s the nearest ER?’”